Friday, November 2, 2007

EU: Citigroup, Goldman Take on Exchanges

From Bloomberg:Citigroup Inc., Goldman Sachs Group Inc. and at least a dozen more banks gain new powers today to challenge the dominance of London Stock Exchange Plc and Deutsche Boerse AG under Europe's biggest revision of securities laws.

The Markets in Financial Instruments Directive takes effect after seven years of planning and opens up competition between exchanges and alternative trading platforms across the 27-nation European Union.

...Investment banks plan to invade the turf of the LSE, the dominant U.K. market; Deutsche Boerse, where about 98 percent of exchange trading in German stocks takes place; and NYSE Euronext, whose markets include the historical monopoly for French shares. New York-based Citigroup, the biggest U.S. bank, and Goldman, the most profitable securities firm, are part of a group of nine companies that plan to start a facility called Turquoise next year.

``In our first year it's absolutely critical'' to attract large trading volumes, Eli Lederman, the Morgan Stanley managing director named a week ago to head Turquoise, said in interview. ``At the outset double-digit market share is eminently feasible and we expect it to grow considerably from there.''...MORE